Tripartite Partners update Advisory on Managing Excess Manpower and Responsible Retrenchment with Key Principles on Fair Retrenchment

1. The Ministry of Manpower (MOM), the National Trades Union Congress (NTUC), and the Singapore National Employers Federation (SNEF) have jointly updated the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment (“Advisory”) to provide employers with clearer guidance on carrying out a retrenchment exercise responsibly, if it is inevitable.
2. The tripartite partners last updated the Advisory in March 2020, in view of the evolving COVID-19 situation which has affected businesses. As retrenchments may still be inevitable for some employers even with the many support schemes rolled out by the Government, the Advisory has been further updated to emphasise the key desired outcomes in any retrenchment exercise.
   
   Key changes to the Tripartite Advisory
   Maintaining a strong Singaporean core
3. The tripartite partners have incorporated the key principles of NTUC’s Fair Retrenchment Framework (FRF) in updating the Advisory, in particular the need to maintain a strong Singaporean core. The Advisory continues to call for the use of objective criteria in the selection of employees to be retrenched. In addition, it reminds employers to take a long-term view of their manpower needs, including maintaining a strong Singaporean core even as they retrench.
   
   Conducting retrenchments responsibly, sensitively and providing support
4. The updated Advisory also provides clarity on the manner in which affected employees are notified and the type of support they receive thereafter. Responsible employers should consider the following good practices:
   • Providing a longer notice period beyond contractual or statutory requirements where possible, so employees can be mentally prepared earlier;
   • Preparing managers for notifying employees of retrenchment in a sensitive manner, such as notifying in person unless impractical to do so;
   • Having HR personnel and union representatives onsite to address queries from retrenched employees, and maintaining an open communication channel with affected employees;
   • Giving affected employees the time and space to adjust to the news, before requesting them to vacate their workplaces; and
   • Being sensitive to emotional needs of affected employees, including offering counselling support.
5. To help retrenched local employees maintain or build up relevant skills, employers should also consider providing training assistance to them post-retrenchment. Employers that had carried out retrenchment but subsequently experienced a pick-up in business activities should also make a deliberate effort to strengthen their local workforce by hiring locals when they are able to do so.
6. A new “Responsible Retrenchment Practices” checklist has also been added to the Advisory as a quick guide to help employers manage retrenchments responsibly.
   
   Tripartite partners urge companies to adopt the recommendations in the Advisory
7. Mr Sim Gim Guan, Executive Director, SNEF, said, “Employers should consider business sustainability and long-term manpower needs when managing excess manpower. If retrenchments are inevitable after considering and exhausting other options, employers should properly plan their retrenchment exercise and communicate with affected employees with empathy and care. We also encourage employers to maintain a strong Singaporean core so that they would have the capabilities and capacities to seize opportunities when the economy starts to recover.”
8. Ms Cham Hui Fong, Deputy Secretary-General, NTUC, said, “We are pleased that the key principles of NTUC’s Fair Retrenchment Framework have been incorporated within the Advisory. Specifically, the updated advisory emphasises the need to safeguard our Singaporean core during retrenchment exercises. It is also important that companies provide unions with early notice so that we can leverage NTUC’s Job Security Council and NTUC’s e2i (Institute of Employment and Employability) to help affected workers source for possible training courses and place them into alternative jobs quickly.”
9. Mr Then Yee Thoong, Divisional Director of Labour Relations and Workplaces Division, MOM, said, “Retrenchment is never easy and affects the livelihoods of employees. Hence, it is important that companies handle them responsibly and treat their employees with respect and compassion. I am glad that the tripartite partners have been able to quickly come to an agreement on the amendments to the Advisory and answer to the labour movement’s proposal for a Fair Retrenchment Framework. This is a testament to the strong tripartite relationship in times of crisis. The updated Advisory provides a more holistic and definitive guide on conducting retrenchments responsibly.”
10. Please visit https://www.mom.gov.sg/TAMEM for the updated Advisory.